Housing loan repayment periods lengthened in 2016

Housing loan repayment periods lengthened in 2016 nearly by six months on 2015 and by almost a year on 2014. In 2016, the average repayment period for new housing-loan drawdowns was 19 years, compared to 18 years, 7 months in 2015 and 18 years, 2 months in 2014. Over half of housing loans drawn down in 2016 had a repayment period of 20–26 years. Longer repayment periods are rare in Finland. In 2016, only 1% of housing-loan drawdowns was granted with a repayment period of over 26 years.

New housing-loan drawdowns picked up during 2016. Households drew down almost EUR 18 bn worth of new housing loans during the year, which is 8% more than in 2015 and 18% more than in 2014. In December 2016, households' new housing-loan drawdowns totalled EUR 1.4 bn, the same amount as in December 2015.

Interest rates on housing loans declined further during 2016. The average interest rate on housing loans drawn down in 2016 was 1.20%, compared to 1.48% in 2015 and 1.89% in 2014. In December 2016, the average interest rate on housing-loan drawdowns was 1.16%, and the imputed margin was 1.12%.

Loans

At the end of December 2016, the stock of euro-denominated housing loans totalled EUR 94.1 bn and the annual growth rate of the stock was 2.4%. At end-December, household credit comprised EUR 14.6 bn in consumer credit and EUR 16.2 bn in other loans.

New drawdowns of loans to non-financial corporations (excl. overdrafts and credit card credit) amounted to EUR 2.5 bn in December 2016. The average interest rate on new corporate-loan drawdowns declined from November, to 1.79%. At end-December, the stock of euro-denominated loans to non-financial corporations was EUR 76 bn, of which loans to housing corporations accounted for EUR 25.7 bn.

Deposits

At the end of December, the stock of household deposits totalled EUR 85.1 bn, and the average interest rate on the deposits was 0.18%. Overnight deposits accounted for EUR 61.8 bn and deposits with agreed maturity for EUR 8.7 bn of the total deposit stock. In December, households concluded EUR 0.5 bn of new agreements on deposits with agreed maturity, at an average interest rate of 0.48%.

Key figures of Finnish MFIs' loans and deposits, preliminary data

October, EUR million

November, EUR million

December, EUR million

December, 12-month change1, %

Average interest rate, %

Loans to households2, stock

124,610

124,763

124,931

2,6

1,56

- of which housing loans

93,819

93,914

94,056

2,3

1,07

Loans to non-financial corporations2, stock

75,400

75,767

76,026

4,9

1,47

Deposits by households2, stock

83,857

85,332

85,092

4,1

0,18

Households' new drawdowns of housing loans

1,530

1,539

1,364

1,16

1 Rate of change has been calculated from monthly differences in levels adjusted for classification and other revaluation changes.2 Households also include non-profit institutions serving households; non-financial corporations also include housing corporations.